Wall Street Webcasting has prepared and provided for you an exclusive
broadcast of Wells Fargo Securities own, Rich Gordon. Gordon is highly
recognized for his weekly narrates regarding the fixed income strategy
at Wells Fargo Securities (NYSE: WFC). This week, Gordon
discusses the surprising success seen in risk markets.
Risk markets, especially the large cap equity indices, have reached
record highs lately. Late last week, the S&P had reached 1950,
demonstrating an extraordinary increase for 12 out of 13 days in a row.
It is now up 5.6 on the year, which is less than half of what the
Spanish market has returned and about a third of what Italy’s market has
returned; but is the same as Europe overall.
Wells Fargo analysts’ say that there are several things to be cognizant
of in fixed income space. The 5 Year Treasury yield is up 20 basis
points from late May. The 5s 30s spread is being watched closely. The
moving average convergence/divergence, which is a trading indicator that
is used to analyze stock prices, has been a good indicator of sell and
buy signals on the 5 year treasury by combining elements of both
momentum indicators and oscillators, since yields and prices move
The Mortgage Applications Index is down over 60% from last summer and is
creating negative net supply; however, mortgage rates do not seem to be
too much different from what they were last year. The housing market is
not strong enough to where it can start to boost the economy. Cross
sector investors continue to find better value in corporates than in
NBS. There is better value and is more product to buy. The U.S. dollar
has moved higher since May. This is due to several factors; one being
that the ECB, along with other central banks, have a lot more work to do
to keep a detrimental deflation from setting in.
To hear a more in depth explanation of which direction the Wells Fargo
analysts believe the economy is heading, please tune into Wells Fargo’s
Please visit the following link to view the video:
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